Grieg reports ‘best Q3 ever’

GRIEG Seafood, one of the world’s largest salmon farming companies, today reported its ‘best third quarter ever’ with a record harvest of 16,875 tonnes – up from 13,911 tonnes, or 21 per cent, on the corresponding period last year.
The operating income during the three months between June and September totalled NOK 1,855 million, a rise of 19 per cent.
The results are better than forecast and Grieg has announced a surprise dividend of one Norwegian kroner (NOK) per share.
The company said production in Norway and British Columbia, Canada was stable during the period, but added that its operation in Shetland ‘remains challenging’.
Grieg said that EBIT (earnings before interest and tax) per kilo stood at NOK 13.60 during the third quarter, slightly up from NOK 13.30 per kilo in Q3 2016.
The average spot price in the quarter was down NOK 3.92 per kilo on Q3 2016, while Grieg Seafood’s realised price increased by NOK 2.79 per kilo.
The contract share for the Norwegian operation was 30 per cent during the period. Compared with last year’s third quarter, costs in Q3 increased by NOK 2.50 per kilo. This year’s increase was driven by a low harvest volume in Rogaland and a weak biological situation in Shetland.
CEO Andreas Kvame (pictured) said: ‘Grieg Seafood has an overall goal to increase production by a minimum 10 per cent annually until 2020. The company also has an ambition for production costs to be at or below industry average.
‘We are working relentlessly to reach these targets, continuously initiating efforts throughout the entire organisation to improve operations. The positive development seen in the quarter indicates that our work is paying off.’
He stressed that access to smolt was vital to ensure growth and lower costs. In addition, the release of larger smolt shortens the time in sea, contributing to reduced biological risk.
This year, Grieg Seafood entered collaborations with other industry players to improve smolt capacity. For 2017, it plans to release 26 million smolt, an increase of 28 per cent from 2016.
By the end of the third quarter (September) the release programme was going according to plan, with an accumulated release of 18 million smolt during the year to date.
Another key element to the growth strategy was greater yield per licence.
‘In order to achieve the desired improvements, locational flexibility is crucial, and this is an ongoing focus of attention in the company’s contact with local authorities which we seek to optimise,’ it adds.
Turning to investors, Grieg said: ‘We aim to provide a competitive return on capital investment to the shareholders in the form of payment of a dividend and share price appreciation.
‘The company’s financial position is regarded as solid and available liquidity at the end of the quarter was strong. Based on this, the board of directors has approved a special dividend of NOK 1.00 per share.’
A more detailed report on Grieg’s Shetland operation appears in the November issue of Fish Farmer.